ANOTHER ESTATE PLANNING HORROR STORY FROM THE REAL WORLD
Recently, I consulted with a young woman who has been married approximately one (1) year. Her husband is waiting on a liver transplant and has been for some time. Despite his precarious health situation, the couple did not do any estate planning after being married. She told me she felt like they had “plenty of time” to get around to estate planning.
However, while the husband was recovering from a fairly routine knee surgery, something went horribly wrong and he now suffers from brain damage. He no longer is capable of making decisions on his own. In fact, before his condition was fully understood, he emptied his bank account and ran up his credit cards to buy a boat (which wasn’t even worth close to what he paid for it) and the family is now broke, except for his social security and retirement income.
The wife came to me to talk about establishing a guardianship for her husband. When I explained that it would cost a minimum of $5,000 to $6,000 to establish a guardianship, she indicated that they could not afford to do this. All of their savings are gone. Had they only come to me for basic estate planning, the total cost would have been $1,250 for a complete will package for both of them, there then would have been no need for a guardianship. Instead, the only planning that the husband had done has placed an additional burden on his wife.
He had a several year old power of attorney in which he named an old Army buddy in south Florida as his agent. The Army buddy would prefer not be involved and to let the current wife handle everything. Unfortunately, he is forced to be her go-between because he is the only one with the legal power to manage her husband’s finances.
We always explain that the cost of estate planning involves not only the initial cost, but the costs of updating or “failing to update.” Here is a vivid example of both the financial and emotional cost of “failing to update.”